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YouTube kills the music video star

YouTube has blocked access to UK music videos after failing to agree a royalties deal with the industry.

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Published: 10 Mar 2009

Last Updated: 31 Aug 2010

YouTube said it hadn’t been able to agree terms of a new licensing agreement with the Performing Right Society, a bargaining group for music publishers, so it’s pulling the plug on all its UK music videos. Judging by the very public bout of mud-slinging that has ensued between the two groups, talks appear to have reached an impasse. YouTube claims that the terms PRS are offering just don’t make economic sense, while PRS is suggesting that YouTube is trying to get the content on the cheap. All very well, but what about our daily Leona Lewis fix?

Music video rights are a complicated business. Generally speaking the visual and sound recording elements of the video are owned by the record labels (and YouTube has a productive deal in place with three of the big four) but the music and lyrics tend to be owned by music publishers, who get so-called ‘collecting societies’ like PRS to do royalties deals on their behalf. YouTube did have a deal with PRS, which has apparently yielded higher traffic and associated ad revenues for all concerned – but this deal has now run out, and the two sides have been unable to agree a new one.

YouTube says there are two problems with the deal on offer from PRS. The first is cost: YouTube reckons it is being asked to pay ‘many, many times more for our licence than before’, which would mean it’d lose ‘significant amounts of money with every playback’. Then there’s transparency: supposedly PRS won’t say which songs are included in the deal. ‘That's like asking a consumer to buy an unmarked CD without knowing what musicians are on it,’ YouTube said on its blog yesterday. For its part, PRS says it is ‘outraged’ by this ‘drastic action’, and claims Google just wants to ‘pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing’.

It’s always hard to know who to believe in these rows. The temptation is often to side with the hard-pressed artists against the internet behemoth looking to squeeze every last penny out of them – but in this case it might not be so simple. This isn’t the first time that an online music business has struggled over UK licensing: US firm Pandora also pulled out of the market last year, citing prohibitive costs, while the likes of MySpace, Imeem and Last.FM have also complained about the industry’s approach.

We’re all for artists getting their dues, but the publishers need to be careful that they don’t end up cutting off their noses to spite their faces. Besides, we credit-crunched punters need our shiny music videos now more than ever...